Bartram v. U.S. Bank Nat'l Ass'n

• Decision Date: 03 November 2016
• Docket Number: SC14–1305.,SC14–1266,Nos. SC14–1265,s. SC14–1265
• Parties: Lewis Brooke BARTRAM, Petitioner, v. U.S. BANK NATIONAL ASSOCIATION, etc., et al., Respondents. The Plantation at Ponte Vedra, Petitioner, v. U.S. Bank National Association, etc., et al., Respondents. Gideon M.G. Gratsiani, Petitioner, v. U.S. Bank National Association, etc., et al., Respondents.
• Court: Florida Supreme Court

211 So.3d 1009

Lewis Brooke BARTRAM, Petitioner,

v.U.S. BANK NATIONAL ASSOCIATION, etc., et al., Respondents.

The Plantation at Ponte Vedra, Petitioner,

v.U.S. Bank National Association, etc., et al., Respondents.

Gideon M.G. Gratsiani, Petitioner,

v.U.S. Bank National Association, etc., et al., Respondents.

Nos. SC14–1265

SC14–1266

SC14–1305.

Supreme Court of Florida.

Nov. 3, 2016.

Kendall B. Coffey, Jeffrey B. Crockett, and Daniel Frederick Blonsky of Coffey Burlington, P.L., Miami, FL; Dineen Pashoukos Wasylik of Dineen Pashoukos Wasylik, P.A., Tampa, FL; Thomas R. Pycraft, Jr. of Pycraft Legal Services, LLC, Saint Augustine, FL; and Michael Alex Wasylik of Ricardo & Wasylik, PL, Dade City, FL, for Petitioner Lewis Brooke Bartram.

Matthew Estevez of Matthew Estevez, P.A., Miami, Florida; and Jason Bravo and Paul Alexander Bravo of P.A. Bravo, P.A., Coral Gables, FL, for Petitioner Gideon M.G. Gratsiani.

Joel Stephen Perwin of Joel S. Perwin, P.A., Miami, FL, for Petitioner The Plantation at Ponte Vedra, Inc.

Michael Darren Starks and Kelly Overstreet Johnson of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, FL; William Power McCaughan, Stephanie N. Moot and Karen Poy Finesilver of K & L Gates LLP, Miami, FL; and David R. Fine of K & L Gates LLP, Harrisburg, PA, for Respondent U.S. Bank National Association.

Lynn Drysdale of Jacksonville Area Legal Aid, Inc., Jacksonville, FL; Thomas A. Cox of The National Consumer Law Center, Portland, ME; J.L. Pottenger, Jr. of Jerome N. Frank Legal Services Organization, New Haven, CT; and James C. Sturdevant of The Sturdevant Law Firm, San Francisco, CA, for Amici Curiae National Association of Consumer Advocates, The National Consumer Law Center, and The Jerome N. Frank Legal Services Organization.

Steven Michael Siegfried, Nicholas David Siegfried, and Nicole Reid Kurtz of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A., Coral Gables, FL; and Todd L. Wallen of The Wallen Law Firm, P.A., Coral Gables, FL, for Amicus Curiae Community Associations Institute.

John Granville Crabtree, George Richard Baise, Jr., and Brian Carson Tackenberg of Crabtree & Associates, P.A., Key Biscayne, FL; Alice Maria Vickers of Florida Alliance for Consumer Protection, Tallahassee, FL; Kimberly Laura Sanchez of Community Legal Services of Mid–Florida, Orlando, FL; Sarah Elizabeth Mattern of Brevard County Legal Aid, Inc, Rockledge, FL; and Peter P. Sleasman of Florida Legal Services Inc., Newberry, FL, for Amici Curiae Florida Alliance for Consumer Protection, Brevard County Legal Aid, and Consumer Umbrella Group of Florida Legal Services.

Andrew David Manko and John Stewart Mills of The Mills Firm, P.A., Tallahassee, FL, for Amici Curiae Upside Property Investment, LLC, Signature Land, Inc., Upside Property Enterprises, Inc., and The Lynne B. Preminger Living Trust.

Major Best Harding and John R. Beranek of Ausley McMullen, Tallahassee, FL; and John Russell Hargrove of Hargrove Pierson & Brown P.A., Boca Raton, FL, for Amicus Curiae Baywinds Community Association, Inc.

Peter David Ticktin, Timothy Richard Quinones, and Kendrick Almaguer of The Ticktin Law Group, P.A., Deerfield Beach, FL, for Amici Curiae Bradford and Cheri Langworthy, and The Ticktin Law Group, P.A.

Robert Rex Edwards and Jessica Pierce Quiggle of Robertson, Anschutz & Schneid, PL, Boca Raton, FL; Melissa A. Giasi and Richard Slaughter McIver of Kass Shuler, P.A., Tampa, FL; Shaib Yariel Rios and Curtis James Herbert of Brock and Scott PLLC, Fort Lauderdale, FL; Andrea Rachael Tromberg of Gladstone Law Group, P.A., Boca Raton, FL; Elizabeth Redchuk Wellborn of Elizabeth R. Wellborn, P.A., Deerfield Beach, FL; Michelle Garcia Gilbert and Jennifer Lima–Smith of Gilbert Garcia Group, P.A., Tampa, FL, for Amicus Curiae American Legal and Financial Network.

Robert Mark Brochin, Joshua Charles Prever, and Brian Michael Ercole of Morgan, Lewis & Bockius LLP, Miami, FL, for Amicus Curiae Mortgage Bankers Association.

David William Rodstein of Padula Hodkin, PLLC, Boca Raton, Florida; and Jane E. Bond and Robyn Katz of McCalla Raymer Pierce, LLC, Orlando FL, for Amicus Curiae U.S. Financial Network.

PARIENTE, J.

The issue before the Court involves the application of the five-year statute of limitations to "[a]n action to foreclose a mortgage" pursuant to section 95.11(2)(c), Florida Statutes (2012).¹ The Fifth District Court of Appeal relied on this Court's reasoning in Singleton v. Greymar Associates, 882 So.2d 1004 (Fla.2004), rejecting that the statute of limitations had expired. Because of the importance of this issue to both lenders and borrowers, the Fifth District certified to this Court a question of great public importance, which we have rephrased to acknowledge that the note in this case is a standard residential mortgage, which included a contractual right to reinstate:

DOES ACCELERATION OF PAYMENTS DUE UNDER A RESIDENTIAL NOTE AND MORTGAGE WITH A REINSTATEMENT PROVISION IN A FORECLOSURE ACTION THAT WAS DISMISSED PURSUANT TO RULE 1.420(B), FLORIDA RULES OF CIVIL PROCEDURE, TRIGGER APPLICATION OF THE STATUTE OF LIMITATIONS TO PREVENT A SUBSEQUENT FORECLOSURE ACTION BY THE MORTGAGEE BASED ON PAYMENT DEFAULTS OCCURRING SUBSEQUENT TO DISMISSAL OF THE FIRST FORECLOSURE SUIT?

We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

In this case, it is uncontroverted that the borrower, Lewis Brooke Bartram, also referred to as the mortgagor, stopped making payments on his $650,000 mortgage and note, both before and after the foreclosure action was brought and subsequently dismissed. For the reasons set forth in this opinion, we answer the rephrased certified question in the negative and hold, consistent with our reasoning in Singleton, that the mortgagee, also referred to as the lender, was not precluded by the statute of limitations from filing a subsequent foreclosure action based on payment defaults occurring subsequent to the dismissal of the first foreclosure action, as long as the alleged subsequent default occurred within five years of the subsequent foreclosure action. When a mortgage foreclosure action is involuntarily dismissed pursuant to Rule 1.420(b), either with or without prejudice, the effect of the involuntary dismissal is revocation of the acceleration, which then reinstates the mortgagor's right to continue to make payments on the note and the right of the mortgagee, to seek acceleration and foreclosure based on the mortgagor's subsequent defaults. Accordingly, the statute of limitations does not continue to run on the amount due under the note and mortgage.²

Absent a contrary provision in the residential note and mortgage, dismissal of the foreclosure action against the mortgagor has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage. Accordingly, we approve the Fifth District's opinion in U.S. Bank National Association v. Bartram, 140 So.3d 1007 (Fla. 5th DCA 2014), and answer the rephrased certified question in the negative.

FACTS AND PROCEDURAL BACKGROUND

On November 14, 2002, Petitioners Lewis Bartram ("Bartram") and his then-wife Patricia Bartram³ ("Patricia"), purchased real property in St. Johns County, Florida (the "Property"). Less than a year later, Patricia filed for dissolution of the couple's marriage, which was officially dissolved on November 5, 2004. Pursuant to a prenuptial agreement the Bartrams had previously executed, the divorce court ordered Bartram to purchase Patricia's interest in the Property.

In order to comply with the divorce court's order, on February 16, 2005, Bartram obtained a $650,000 loan through Finance America, LLC, secured by a mortgage on the Property in favor of Mortgage Electronic Registration Systems, Inc., in its capacity as nominee for Finance America (the "Mortgage"). Finance America subsequently assigned the Mortgage to Respondent, U.S. Bank National Association (the "Bank"), as trustee and assignee. A day later, on February 17, 2005, Bartram executed a second mortgage (the "Second Mortgage") to Patricia as security for a second mortgage note of $120,000.

The Mortgage was a standard residential form mortgage and required the lender to give the borrower notice of any default and an opportunity to cure before the mortgagee could proceed against the secured property in a judicial foreclosure action. Specifically, paragraph 22 of the Mortgage was an optional acceleration clause and provided that the lender was required to give the borrower notice that failure to cure the default "may result in acceleration of the sums secured" by the mortgagee and foreclosure of the property:

Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial

...